Nevis is a modern forward-thinking financial centre located in the Eastern Caribbean. Its unique legislative and fiscal independence enables it to be at the forefront of delivering practical solutions to an increasingly mobile and international client base.
Over the years, Nevis has developed several opportunities to meet corporate and individual needs and to enable affairs to be organised in an efficient and confidential manner.
Important Recent Development
In late 2020, the St Kitts & Nevis Inland Revenue Department (IRD) issued guidance notes regarding the treatment of international companies in relation to federal tax.
Where a company is managed and controlled outside the Federation, for example in Europe, and the company does not have a permanent establishment in St Kitts & Nevis (just a registered office and registered agent), the company is classified as 'non-resident', and is only subject to taxes on income arising in St Kitts & Nevis.
All companies complete a simplified annual tax declaration, in which they state whether there are local connections or whether the company should be considered non-resident and will not therefore be subject to tax in Nevis.
It is anticipated that these guidelines will become law during 2021.
Nevis Resident Companies
Nevis companies with management and control exercised in and from Nevis will be subject to local corporate tax, currently at the rate of 33%
What Are the Corporate Opportunities in Nevis?
The new IRD guidelines provide much needed clarity on the 'post exemption' Federal Tax Regime. Non-resident companies now have greater security and re-assurance that their activities will not be taxed in St Kitts & Nevis.
Another reason why Nevis remains popular include its continued privacy from public scrutiny, as it does not operate Government or Public Registers detailing beneficial ownership. Companies can also be established and managed with exceptional efficiency. Nevis does not operate a substance test regime.
Nominee and Officer Companies
The use of Nevis companies to act as corporate officers or as nominees is still possible and due to the nature of their non-income status, such use is unlikely to generate a tax liability.
Limited Liability Company as Unlimited Partners
Nevis LLC's are ideal to act as the unlimited partner in a Limited Partnership, and would not suffer significant tax leakage, despite the recent corporate tax changes in Nevis.
Pre-migration Wealth Planning for internationally mobile families
Nevis offers a good opportunity for pre-migration wealth planning.
Where a family is relocating to a country which is not their country of birth, for example, the UK, USA, or a country in the EU, they will often have tax planning opportunities which should be exercised before they become resident in the new country. This often allows them to use special tax rulings and structures which help the family to segregate and protect its worldwide wealth. In such a scenario, a tax neutral third country, such as Nevis can offer some significant benefits.
It is important to note, that this planning needs to be undertaken well in advance of the family or individual members of a family taking up their new residence.
Private Trustee Company (PTC)
Nevis remains a popular jurisdiction to operate a PTC, both for Nevis International Exempt Trusts and as trustees of trusts, created and currently situated, in other jurisdictions.
Nevis Holding Foundations and Trusts
Nevis foundations and trusts can be used to own Nevis IBCs and/or LLC's. Nevis Multiform Foundations and Trusts are exempt from corporate tax.
Nevis Multi-Form Foundations (MFF's) the Possibilities
Why are they Popular?
Multiform Foundations are increasingly being used for certain types of activity and asset protection. They can be particularly beneficial as MMF's can adopt the identity of a foundation, trust, company, or partnership, and are tax exempt in St Kitts and Nevis, regardless of where they are managed.
Other benefits include the fact that they have their own legal personality and offer attractive wealth structuring opportunities. In addition, the MFF Ordinance contains special asset protection rules which deter frivolous lawsuits.
Conversion to a MFF
Foreign or domestic corporations and/or trusts can be converted to a foundation and the 'form' of the foundation can be changed to another form, for example, a Trust Foundation can convert to a Partnership Foundation.
There are many reasons that a Nevis Foundation might be chosen and these include; education support, succession planning, asset protection, and the provision of confidentiality for separate funds to protect junior members of the family.
Using Family Foundations to Protect the Identity of Vulnerable Members of a Family whilst Studying Abroad
Where a family lives in a country where the protection of their personal identity is very important, having the ability to protect their confidentiality can be extremely valuable.
An example would be, a Founder establishes a Nevis Educational Foundation, for the direct purpose of providing for the education of a junior member of the family who will be studying abroad for a specific period of time.
The Foundation would then open a bank account which can also provide a credit card. In this manner the education expenses and living accommodation, can be paid by the foundation, directly from its bank account and the daily living expenses can be paid through the credit card. This can seriously limit the amount of exposure of the child's identity and also provide some control and oversight of their spending.
Nevis International Exempt Trusts
The jurisdiction of Nevis is a very good location for a trust, where the benefits include:
- Forced heirships are not recognised.
- Rules disallowing 'perpetuity' do not apply, unless otherwise provided for, and therefore a trust can have an unlimited duration.
- Foreign judgements are not enforceable and would need to be re-presented in Nevis, where applicable.
- In certain circumstances, several separate trusts can be combined into one trust, or a single trust can be divided into several trusts.
Citizenship By Investment
Dixcart Nevis, is a very experienced provider of Citizenship by Investment services and has successfully helped many families through the process to achieve citizenship. This programme enables successful applicants to hold a St Kitts & Nevis passport.
A major advantage of St Kitts & Nevis citizenship is that it guarantees receipt of a St Kitts & Nevis passport, with full Schengen travel rights throughout Europe.
There are three routes to citizenship (2 relate to real estate, and 1 one relates to a 'one off donation'). Depending on the origin of the applicant and the quality of the application, a 'Fast Track' can be selected, with approval, in principle, being achieved in between 45 and 90 days.
Cost Reduction: Citizenship Applications
At the start of March 2021, the St Kitts & Nevis Government announced a cost reduction for applications to the 'Sustainable Growth Fund' one of the routes to gain citizenship. This cost reduction is available until 31 December 2021.
The cost for an applicant and spouse is now $150,000, a cost reduction of $25,000. The cost for a family of four is also now $150,000, a cost reduction of $45,000.
Key Characteristics and Benefits of a St Kitts & Nevis Passport
- Applicants do not need to travel to St Kitts & Nevis for the application and there are no annual residency rules to maintain the passport.
- A single application can include children up to a maximum age of 30 and parents with a minimum age of 55, as well as unmarried, dependent siblings up to the age of 30.
- Passport holders enjoy full Schengen privileges and can travel to approximately 156 countries worldwide, either on a visa free, or visa on entry basis.
- If holders of the passport choose to move to St Kitts & Nevis there is no personal income tax, no gift tax, no death duties, no estate tax, no inheritance tax and no capital gains tax on worldwide income.
- The passport allows the holder to reside in other Caribbean Community countries (Caricom) if they wish to do so. There are 15 Caricom member states.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.